Planned tax changes could affect Brits buying property in France

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France remains one of the most popular destinations for
Brits buying property abroad.  According
to the Daily Telegraph, ‘France
overtook Spain at the end of 2011 as the most searched for location for British
buyers looking to invest in a property overseas.’ 

But, if you are thinking about buying a property in France,
this year’s General Election could result in a new government changing the
country’s inheritance tax laws.  Keep
reading to learn more about how your children could end up paying more tax on
your French property.

 Changes to inheritance tax laws may cost
property owners thousands

At present, French inheritance tax varies from zero per cent
to 60 per cent.  There is also an inheritance
tax-free allowance between parents and children of about €160,000 (around
£134,000).  This means that if your
parents had a €200,000 house in France, only about a fifth would be taxable on
their death.

However, experts believe that if a new government wins power
in France this year, the inheritance tax free allowance is likely to be cut by
two thirds.  This means that children
will face a much higher tax bill when they inherit a French property from their
parents.

As the Telegraph
reports, the situation is further complicated because French inheritance tax depends
on the residence status of the deceased and, to a lesser extent, the
beneficiary.

Nick Marr from leading overseas property portal at HomesGoFast.com, said: “If there is a change of government in France then I expect to see
changes to the inheritance tax laws. 
This could result in children paying much more tax on the death of their
parents.

“There can be complications depending on the residency
status of the parents and so it’s always worth getting specialist advice.”